Every business needs leads; they're the lifeblood of your marketing machine. The trick is to set up a marketing system that lets you create a steady flow of leads without having to subject yourself to the torture of cold calling.

Create a two-step lead machine, and you can say goodbye to cold calling while still generating all the qualified, permission-based leads you can handle.

The basic idea behind the two-step approach is to create a free information product that your target market will see as a valuable read or listen, such as a workshop, evaluation, checklist, newsletter, course or tipsheet. It should have a catchy title that's related to your business, like, "How to Tell if Your Roofing Contractor Is Lying," or "101 Things You Can Do With Your iPod." This is sometimes referred to as bait.

Now that you have your value-packed information product, every bit of your advertising--Yellow Pages, magazine ads, direct mail, business cards, letterhead, e-mail signature, website--should focus on getting people to request, pick up or download that report. Don't try to do anything else with your advertising; let the report sell for you. That's Step One. For startups, this approach is so much more effective than traditional advertising for several reasons. First, this tactic allows you to draw interest without having to tell your entire story--something that's tough to do in a small ad. Second, it allows you to demonstrate your exper-tise in a nonthreatening way: on the pros-pect's terms. Nobody likes to be sold to, but if they take the time to read your report and understand that what you do has value, the relationship can begin.

A prospect who has requested your free information is officially a hot lead. When prospects visit your website, they're effectively raising their hand and identifying themselves as being interested in what you do. When that happens, the hardest part of your sales job is done. Capture all the names and e-mails of those who request the report. Then your sales efforts can focus on taking that group--and only that group--to the next step in the process. That may mean following up with an appointment or simply a series of more advanced mailings. That's Step Two.

If you take this advice to heart, everything about how you market your business will change. And finding new business will become a much more rewarding and valuable experience.

Referrals: Ask your sources to introduce your business to others by way of your free report, web page or newsletter. This makes referrals easy for them and assures that your story is told.

Cold calling: I know, I know. You should never need to cold call. But if you do, do it this way: Call those prospects on your list and, instead of trying to convince them to give you five minutes of their time next Tuesday, offer them the address for your power-packed free info, then shut up. Your prospecting time will be much more productive.

John Jantsch is a veteran marketing coach, an award-winning blogger and the author of Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide. Find out more at ducttapemarketing.com.